Self employed: which expenses can you claim?
There are two ways to claim your self-employed expenses:
A. The easy way – use the trading allowance
Simply claim a flat £1,000 as a “self-employed trading allowance“:
- it’s super easy to do
- all sole traders qualify: construction workers, freelancers, etc.
- you don’t need to worry about keeping receipts
- the downside: if you choose this allowance, you won’t be able to claim anything else.
B. Or claim every single business expense
- makes sense if your expenses are over £1,000 per year
- you will not be able to claim the trading allowance anymore
- the downside: you need to keep all your business receipts – although sometimes bank statements can work.
What expenses are eligible if I choose Option B?
|Type of expense||Can I claim it?||How much can I claim?|
|Home rent||Yes||Either claim the percentage that you use your home for work, or a flat home office allowance|
|Home insurance||Yes||Same as for home rent|
|Home utilities (electric bill, phone bill, etc.)||Yes||Same as for home rent|
|Home repairs||Yes||Same as for home rent|
|Home mortgage payments||Not really||Only a part of the interest on mortgage – similar to how you claim rent. You’re probably better off using the flat home office allowance|
|Laptop for work||Yes||100%|
|Phone for work||Yes||100%|
|Antivirus, Office software||Yes||100%|
|Paper and pens for work||Yes||100%|
|Protective gear for construction work||Only if your contractor is not already providing you with it||100%|
|Special uniforms||Only if your contractor is not already providing you with it||100%|
|Car insurance||Yes||Use the percentage that you use your car for work. Keep the invoice. Or just use the flat mileage allowance|
|Fuel||Yes||Use the percentage that you use your car for work. Keep the invoice. Or just use the flat mileage allowance|
|Parking fees||Yes||Use the percentage that you use your car for work. Keep the invoice. Or just use the flat mileage allowance|
|Taxi fares||Yes||Only trips for work – keep the receipts|
|Travel from home to regular workplace||No||—|
|Hiring other people (subcontracting work)||Yes||100%|
|Buying goods for resale (e.g. on eBay)||Yes||100%|
|Buying raw goods for production (e.g. you’re making and selling hats on Etsy)||Yes||100%|
|Bank, overdraft, and credit card fees||Yes||If you’re using cash basis then you can only claim up to £500. Otherwise 100%|
|Interest on loans||Only if they are for work||100%|
|Leasing payments||Only if they are for work||100%|
|Business insurance||Only if it’s for work||100%|
|Bad customers||Only if you’re using traditional accounting||100%|
|Advertising (newspapers, local Google Ads, etc.)||Yes||100%|
|Website development, hosting, domain name, etc.||Yes||100%|
|Meals with clients or suppliers||Yes||100%|
|Drinks with clients or suppliers||No||—|
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